The Centre will soon phase out the peak GST rate category of 28% for all goods other than luxury and sin items with Union minister Arun Jaitley on Friday saying it is only a matter of time.
“Within a record period of 13 months, the GST Council has almost phased out the 28% category. It is only a matter of time that the final obituary of the ‘Congress Legacy Tax’ is written. Only the luxury-sin tax would remain,” Jaitley said in a Facebook post.
This tax reduction has reduced the cost to the consumers, increased his purchasing capacity and added to the increased consumption in the economy. All household items stand reduced from 28% to 18% and 12%. All construction items, except cement, stands reduced. Most white goods stand reduced, Jaitley said.
“There is no better opportunity for consumers to make purchases than in the environment which the GST has created. It is an opportunity to celebrate the biggest tax reform since Independence, which has replaced ‘Congress Legacy Tax’ with a ‘good and simple tax,” he said on a day when the lowered GST rates, as decided by the GST Council on Saturday, are going to come into effect.
The GST Council on Saturday had decided to lower rates of 100-odd consumer items, including the most contested ones like sanitary napkins, on which the levy was as high as 12%.
“The pre-GST tariff was a Congress Party legacy. The standard rate for central excise plus VAT plus CST was 12% + 14% + 2%. To this, if the cascading effect of the tax on tax was added, the eventual tax payable on a commodity was 31%. Items of household use from mineral water, hair oil, toothpaste, soap, dairy, to construction material and white goods were all taxed at 31%. The total number of goods falling in this category was 235. This 31% tax was Congress Party’s gift imposed on India,” Jaitley wrote.
Jaitley also mentioned the passage of the Prevention of Corruption (Amendment) Bill, 2013, last week and said those were the two significant reforms of the week.